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Informist, Wednesday, Apr. 1, 2026

 

MUMBAI – Fitch Solutions company BMI has forecast global gold prices to fall and average $4,600 per ounce in 2026. It also expects prices to remain under pressure as the year progresses due to inflation concerns from higher oil prices on the back of the US-Iran war, fuelling a hawkish pivot in the US Federal Reserve's rate policy. 

 

Gold has been on a strong rally since 2024, with the highest level on record reached on Jan. 29 at $5,645.6 per ounce, driven by geopolitical conflicts and renewed questions on the US Fed's independence, it said in a report. However, after the war in Iran broke out on Feb. 28, prices came under pressure as rising oil prices fuelled inflation and prompted a more hawkish Federal Reserve, increasing expectations of rate hikes. At the same time, institutional selling, with the central bank of Turkiye selling 58–60 tonnes of gold over two weeks in March and Russia selling 15–15.5 tonnes of gold over January and February, added to the pressure on prices, BMI said.

 

"We expect gold to remain under pressure in Q2 2026 and beyond, with hawkish Fed sentiments and US dollar strength dampening gold's attractiveness," BMI said.  

 

US Fed policy will be crucial for gold, as lower interest rates typically boost demand for the non interest-yielding safe-haven asset. "As markets are starting to expect a rate hike instead, we expect gold prices to suffer a significant setback," BMI said. The dollar is trading near the upper end of the 95–100 range seen since June 2025, supported by safe-haven demand and strong trade conditions as the US is an oil exporter. If energy disruptions continue, the dollar could strengthen further, limiting gains in gold prices, it said. 

 

"While higher inflation is likely from March 2026 readings due to the US-Iran war and the rise in oil prices, we expect additional holdings of gold as a hedge against inflation (higher inflation also reduces real bond yields) to be offset by the simultaneous rise in US treasury rates and market expectations of rate increases," BMI said.

 

In the long term, beyond 2026, gold prices are expected to ease, BMI said. "The main driver of easing gold prices in the longer term will be greater risk-on sentiment as the global economy recovers in the later part of the decade. Despite our outlook for gold prices to weaken, we do not see a return to pre-Covid levels," it said. Gold prices will average $4,060 per ounce during 2026-30, compared with $1,393 per ounce in 2019, it said.

 

However, "We see a number of upside and downside risks to our current forecasts for gold prices," BMI said. On the upside, a weakening US labour market or slower global growth could push the Fed toward rate cuts, boosting gold prices. Ongoing geopolitical tensions or trade disruptions could add further support. On the downside, a stronger US dollar and rising bond yields from potential rate hikes would reduce gold's appeal, causing a sell-off and bringing prices back to $3,000 per ounce levels, it said in the report. 

 

At 1154 IST, the most-active June gold contract on the COMEX was up 0.9% at $4,740.0 per ounce.  End

 

US$1 = INR 94.83

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Reshma Ravi

Edited by Avishek Dutta

 

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